Quick Guide: This is Pay Equity Analysis

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Lönekartläggning - så funkar det Equal pay for equal work – it should be a given. Yet we still see the same uneven wages between men and women in our workplaces. To regulate this problem, all employers are, according to Swedish legislation, obliged to perform a pay equity analysis. Are you hesitant about the legal requirements and how to approach them? Flex sorts out which rules apply.

What Is Pay Equity Analysis?

According to the Swedish Discrimination Act, all employers are obliged to perform a pay equity analysis, which involves investigating gender differences in pay for people who have similar job functions and comparably equal work tasks. Previously, the pay equity analysis was performed every third year, but since 2017 it should be performed annually. At which time during the year the equity analysis is performed doesn’t matter.

What Is the Purpose?

The pay equity analysis is used to discover, remedy, and prevent unfair gender differences in pay. Beyond this, the analysis can also bring several additional values to the company: - greater support for wage revision and individual wage setting - better insights into the company’s wage structure - a more equal workplace and a stronger employer brand

How Is the Pay Equity Analysis Disclosed?

The pay equity analysis should be disclosed to the Equality Ombudsman (Diskrimineringsombudsmannen) upon request. Employers that don’t meet the legal requirements may be fined.

How to Perform a Pay Equity Analysis

In order for the pay equity analysis to function properly, several parties should cooperate and adopt a clearly defined structure. It pays off to be thorough the first time, as it will be beneficial when doing it the next time. Here is a quick checklist of all the steps of the analysis, from start to finish:

  1. Assemble a Work Group A pay equity analysis should be performed in cooperation between employer and employees (directly or through a trade union) Create a team and make a work plan.
  2. Compile Pay Agreements and Practises A pay equity analysis should be performed in cooperation between employer and employees (directly or through a trade union). Compile all agreements, routines, and criteria that determine the employees’ pay and job benefits.
  3. Map and Analyse Differences in Equal Work Group your employees according to work tasks. Map and analyse possible gender differences in pay with those who perform the same, or similar, work tasks.
  4. Map and Analyse Differences in Equally Valued Work (job evaluation) The next step is to examine if there are any differences between female-dominated occupations and other equal occupations. This step should include mapping and analyses of:- female-dominated occupations (occupations that are performed by women by 60 % or more) - equal occupations (read more about what this means below) - female-dominated occupations where the requirements are evaluated as higher although the wages are lower. These occupations are then compared to occupations that are not female-dominated and with lower requirements, but higher wages. If, despite higher requirements, there is no objective explanation to why the female-dominated occupation has lower wage level, the employer is obliged to take necessary measures.
  5. Documentation/Action Plan Additionally, all employers who have ten employees or more should document their pay equity analysis. The documentation should include the results from the mapping and the analysis, and the accompanying measures and wage adjustments that you have agreed upon. You should also document how the cooperation has been organized, and account for how the measures taken from the previous year’s pay equity analysis have developed.

What Does Equal Work Mean?

Equal work refers to work that require equal demands from the employees who perform them. The job evaluation is performed based on the following criteria: knowledge and skills, responsibility, effort, and working conditions. The evaluation should be completely based on the requirements of the work; the employees’ individual competence and accomplishments should not be included.

Do you want to know more?

Our hope is that this guide has given you a more thorough understanding of the fundamentals of the pay equity analysis. Want to dive deeper? The Equal Ombudsman has an e-education on the subject (in Swedish).

Smart Tools That Facilitate Your Pay Equity Analysis

Does the pay equity analysis feel like a burdensome and difficult procedure? With the right tools the process will run smoother – and you can rest assured that everything meets the legal requirements. In our HR system Flex HRM Employee you will soon have access to a system support that guides you through all the steps of the pay equity analysis – from job evaluation to action plan. Contact us if you want to know more!

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